Home sales in Dallas continue to look great, with overall Dallas sales in July up 23% over last July and up 16% year-to-date vs year ago. Median sales prices were up 10% in July and 8% year-to-date. The “days on market” until sold fell again, now only 66 days year-to-date. This improvement in sales, price and time on the market has been almost uninterrupted since the first of the year. What could be driving this, given we’re still in a mediocre economy without robust job creation? I believe it is a combination of an improving confidence in the future, record low mortgage interest rates, opportunistic buying, including a lot of investor purchases, and very high apartment rental rates. By most accounts, it’s far cheaper to own than to rent, even when you throw property tax and insurance onto the new mortgage. Watch out if we are able to bring Texas’s unemployment rate down to a more normal 3.5-4.0%!
I have touched on interest rates previously. Just this week, one of my clients closed on a home with a new 15-year 2 7/8% mortgage. That is almost giving it away. On opportunistic buying, the conventional wisdom is that we hit bottom earlier this summer, and prices have turned the corner. The S&P/Case-Shiller home price index has been reporting higher home prices, not just in Dallas, but nationwide. Investors here and from overseas are buying real estate for rental purposes. Where else are you going to put your money? On renters, Zillow says buying a home pays off after three years on average.
Another factor that is often overlooked is the low pace of new home construction. Recall just 2-3 years ago the stories about the large national home builders grinding to a halt due to the abysmal state of the economy and absence of financing. There was no speculative construction. Even with a buyer in tow, there was very little construction. Banks weren’t lending. Well, in a normal year, we build 1.6 million homes nationally. We will need 16 million new homes in the next 10 years to satisfy need. This year, we are on pace to build 650,000 homes nationally. You can see where this is heading. We have a shortage of housing now, and, until we catch up, we can expect prices to keep moving up. Real estate moves in cycles, just like everything else, but in the long run, it’s a great investment.
Overall Market (North Texas):
Jul 12 vs 11: Sales up 23%, med price up 10%, DOM 67, down 20%.
YTD 12 vs 11: Sales up 16%, med price up 8%, DOM 77, down 14%.
Uptown, Downtown and Turtle Creek (Condos and Townhomes):
Jul 12 vs 11: Sales down 13%, med price up 31%, DOM 109, down 5%.
YTD 12 vs 11: Sales up 20%, med price up 2%, DOM 104, down 15%.
Highland Park and University Park, Bluffview, Devonshire and Greenway Parks:
Jul 12 vs 11: Sales up 22%, med price down 13%, DOM 101, up 10%.
YTD 12 vs 11: Sales up 20%, med price down 2%, DOM 79, down 19%.
East Dallas (incl M’s and Lakewood):
Jul 12 vs 11: Sales up 17%, med price up 32%, DOM 61, down 25%.
YTD 12 vs 11: Sales up 25%, med price up 7%, DOM 78, down 17%.
North Dallas (South of LBJ):
Jul 12 vs 11: Sales up 96%, med price up 25%, DOM 85, down 33%.
YTD 12 vs 11: Sales up 27%, med price down 5%, DOM 95, down 17%.
Far North Dallas (incl Addison and to Park Blvd in Plano):
Jul 12 vs 11: Sales up 43%, med price up 2%, DOM 53, down 24%.
YTD 12 vs 11: Sales up 33%, med price unchanged, DOM 66, down 22%.
Northwest Dallas:
Jul 12 vs 11: Sales up 12%, med price down 3%, DOM 89, down 5%.
YTD 12 vs 11: Sales up 29%, med price up 9%, DOM 78, down 10%.
Northeast Dallas (incl Lake Highlands):
Jul 12 vs 11: Sales up 31%, med price up 11%, DOM 47, down 33%.
YTD 12 vs 11: Sales up 32%, med price up 6%, DOM 58, down 21%.
Plano:
Jul 12 vs 11: Sales up 53%, med price down 5%, DOM 51, down 9%.
YTD 12 vs 11: Sales up 21%, med price up 4%, DOM 58, down 25%.
Frisco:
Jul 12 vs 11: Sales up 9%, med price down 1%, DOM 54, down 27%.
YTD 12 vs 11: Sales up 14%, med price up 5%, DOM 62, down 19%.
Richardson:
Jul 12 vs 11: Sales up 47%, med price up 6%, DOM 43, down 41%.
YTD 12 vs 11: Sales up 20%, med price up 3%, DOM 60, down 19%.
Southlake:
Jul 12 vs 11: Sales up 68%, med price down 5%, DOM 57, down 12%.
YTD 12 vs 11: Sales up 36%, med price up 1%, DOM 70, down 17%.
Coppell
Jul 12 vs 11: Sales up 7%, med price up 6%, DOM 57, unchanged.
YTD 12 vs 11: Sales up 3%, med price up 2%, DOM 60, down 10%.
Allen:
Jul 12 vs 11: Sales up 20%, med price down 1%, DOM 50, down 26%.
YTD 12 vs 11: Sales up 11%, med price up 1%, DOM 60, down 18%.
Rockwall (incl Heath):
Jul 12 vs 11: Sales up 51%, med price up 5%, DOM 77, down 23%.
YTD 12 vs 11: Sales up 21%, med price up 3%, DOM 73, down 21%.
Las Colinas and Kessler Park: Call Me!
Here is a look at Single Family home sales by price category for YTD 2012 vs 2011:
$200-299K (18.5% of sales): up 27%, 5 months inventory
$300-399K (8.0% of sales): up 29%, 6 months inventory
$400-499K (3.5% of sales): up 26%, 7 months inventory
$500-599K (1.7% of sales): up 25%, 8 months inventory
$600-699K (1.1% of sales): up 17%, 10 months inventory
$700-799K (0.6% of sales): up 26%, 12 months inventory
$800-899K (0.4% of sales): up 16%, 13 months inventory
$900-999K (0.3% of sales): up 11%, 12 months inventory
$1MM and up (1.1% of sales): up 24%, 14 months inventory
Here is a look at Condos and Townhomes sales by price category for YTD 2012 vs 2011.
$200-299K (16.6% of sales): 403 units vs 292 units year ago, 6 months inventory
$300-399K (5.9% of sales): 142 units vs 139 units year ago, 8 months
$400-499K (3.6% of sales): 86 units vs 45 units year ago, 9 months
$500-599K (1.6% of sales): 41 units vs 25 units year ago, 10 months
$600-699K (0.3% of sales): 7 units vs 14 units year ago, 19 months
$700-799K (0.5% of sales): 12 units vs 13 units year ago, 18 months
$800-899K (0.4% of sales): 10 units vs 6 units year ago, 10 months
$900-999K (0.1% of sales): 2 units vs 5 units year ago, 42 months
$1MM + (0.5% of sales): 12 units vs 22 units year ago, 37 months
Bob Edmonson, Allie Beth Allman & Associates, 214-563-8540